December 05, 2017

Slavery and the Southern roots of conservative economics

by Doctor Science

I've been reading a lot of books about slavery and antebellum America over the past few years, and I keep noticing how many current "conservative", Republican economic principles were already held by Southern enslavers and their politicians.

"Low taxes" was always their watchword. They were doubtful about infrastructure spending (then called "improvements") and public education. They wanted the justice system, including prisons, to pay for itself (via fines, bail, and prison labor).

Several people on Twitter mentioned that the word "immiserating" was new to them. I, on the other hand, have become familiar with the word because historians of American slavery use it to describe the economic status of enslaved people. In particular, they use it for the way that American slaves were impoverished to an extreme degree. They usually had enough food, but they had only the bare minimum of clothing, housing, and medical care, and no education, furniture, livestock, household goods, privacy, or land.

It was a premise of American slavery that enslaved people could be objects of the economy, but they could not be actors: they could not, as a rule, have money, nor could they barter goods and services "on the side" to other slaves or to free people. In Masterless Men: Poor Whites and Slavery in the Antebellum South, Keri Leigh Merritt argues that Southern slave patrols weren't just for controlling slave behavior, they also policed poor whites who might be inclined to trade with slaves, form relationships with them, and realize how much they had in common.

Usually when people talk about the economic effects of slavery on the Southern states, they discuss how it tended to depress the wages of free labor. What I haven't seen experts point out is how slavery strangled consumer demand. Persistent postbellum Southern poverty is usually blamed on its slow industrialization and agricultural economy. But I think it's due to the persistence of a bias against demand, which in modern times become arguments for "supply-side economics" and "austerity".

Before the Civil War, the men who ran the South felt that their section was wealthy, because they were wealthy. But the wealth of a society is much closer to the median wealth than the mean, and in e.g. South Carolina, which had a slave majority, the median wealth was zero.

Because the majority of people in SC couldn't buy shoes or ships or sealing-wax, there were very few potential customers for the poorer half of the white population to sell things to. Their only possible work was agricultural--but all the decent farming land was owned by enslavers. So (as Merritt outlines in her excellent book) the bottom quarter or half of the white population was effectively forced out of the monetary economy, subsisting on itinerant work, hard-scrabble farming, and hunter-gathering.

We're romanticized hunting to feed your family, but when large numbers of people in a (supposedly) advanced economy are doing it, that economy is *broken*. I'm not saying, as historians did decades ago, that the South was a "pre-capitalist society". As I learned from The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward Baptist, slavery was a crucial part of the American capitalist system, it relied on international trade, and slaves were often mortgaged. But the Southern ruling class had, as a matter of policy, carved a majority of the population out of the money-based economy. There wasn't -- there couldn't be -- enough economic activity to cover all of the people, and that's a pretty good definition of an impoverished society.

Southern rulers' understanding of business and economics was "supply side". They were almost all in the business of producing raw cotton for export. Their experience was that when one of them got extra money, he would invest it in more land and more slaves, to produce more cotton. From their POV, giving more money to the rich indeed meant more jobs would be created--if by "jobs" you mean "forced labor and stolen work".

Their experience also was that the market for cotton was insatiable, that they couldn't overproduce or flood the market. The only important factor was supply, demand was endless. The King Cotton theory seemed quite reasonable to them: they could keep upping production, secure that the price they got for the last bale would be the same as for the first.

I'm not saying modern GOP Supply-Side-ism is directly descended from the antebellum Southern version, but there seems to be a continuity.

Today, the closest thing to King Cotton's supply-side bias is King Petroleum: a commodity so essential that a business (below the level of a sovereign nation, at least) doesn't have to worry about demand, only about producing as much as possible.

This may explain why petroleum and other extractive industries are so prominently Republican: like 19th-century cotton producers, they feel like they're living in a supply-side world, detached from observing the effects of demand on their business.

I'm not saying the remnants of slavery are the only element in GOP economics. Probably more important is the economic Calvinism William Neil rightly described as Sinners in the Hands of an Angry Market. Paul Waldman sums it up, as expressed by Senators Grassley and Hatch and embodied in the current Tax Bill:

they're driven by a moral imperative, one that says that no matter what effect cutting taxes on the wealthy and corporations might have on the economy, it's just the right thing to do. It rewards the virtuous, and you can tell who the virtuous are by how much money they have.

As Fred Clark and the commentariat at Slacktivist like to say, Thus, Calvinism.

Let those who are too intent on wealth beware lest they should falsely employ Joseph's example as a pretext: because it is certain that all contracts which are not formed according to the rule of charity are vicious in the sight of God

Comments

I claim the Kansas lesson (and Oklahoma is repeating it) is this: (a) even in the most rural or urban states, you have to win in the suburbs to win state control; (b) if you cut K-12 spending too far the suburbs will abandon you; and (c) K-12 spending is the only place in a typical state budget where you can find enough money to offset large tax cuts in the long run.

The Kansas tax cuts were self-defeating from the beginning, it's just that the feedback loop has a several-year lag.

I have to read the article when I have time, but that sounds encouraging. My one bit of political faith is that people won't continue to support politicians who make their own lives miserable, not if they can see a direct connection between the politician's actions and the misery it causes. Of course you can fool lots of people a lot of the time.

The antebellum social order n the south was also, to some extent, descended from that surrounding pre Civil War English landed aristocracy.
Whatever else that might have been, it wasn't Calvinist (unlike say New England and Appalachia)...

It seems to me that slavery actually damaged the southern economy by inhibiting industrialization and, possibly causing cotton to be overproduced. (The latter is pure conjecture, since I know nothing about relevant agricultural considerations.)

When labor is free (to the "employer") it will be used to excess in situations where, if a market wage were paid, it would be a good idea to use equipment instead. Similarly, labor-intensive activities enjoy an advantage over more capital-intensive ones.

So manufacturing suffers, because why invest in factories when there are slaves? This is not unlike the resource curse.

The idea that slavery kept the South back by suppressing industrialization is common. I'm making AFAIK a *new* suggestion: that slavery impoverished and retarded the region because it suppressed *demand*.

This ties into Economic Calvinism. Our society gives us a deeply-ingrained feeling that spending is sinful on some level, while saving, investing, and producing are virtuous. But this is really terrible economics: no-one can sell if no-one else is buying, we need both halves of the equation for the economy to go 'round.

The idea about demand seems plausible and worth a (much further) look, especially as explaining why the free poor were so poor (cf the recent book "White Trash", though it, unhappily, avoids even rudimentary economic thinking). It also means that you have to ask "what were slaves legally allowed to do or own?" which probably has different answers for (say) the Roman empire and antebellum SC.

I am still thinking on this and as usual attempting to globalize it and use comparative history.

Shogunate Japan after 1600 had a written (I think) policy of keeping peasants just a smidgen below subsistence levels. Very carefully calculated on amount of rice necessary to feed a person, assess each years harvest, tax away surplus. It very quickly failed and was ignored because too much bureaucratic effort was necessary and because increased production had powerful local boosters. Samurai also had sumptuary laws and repressions.

But yeah, looking at effective demand limitation as a political tool is a good idea. I would guess that is a common and critical tenet of conservatism, as I define it, Levi-Strauss "slow cultures", Sparta vs Athens, etc.

Glanced at Colin Duncan, The Centrality of Agriculture, mostly about England and trying to counter the focus on industrialization and modernity. Maybe next, maybe soon.

It is not clear to me what you mean when you suggest that slavery suppressed demand.

Obviously, if most of the people around are poor, there won't be much demand for consumer goods, and if income mostly flows to the already wealthy demand doesn't get much of a boost. A slave-based economy is an extreme example, since no income at all flows to the (very large, in the antebellum south) slave population.

ISTM that one way to think about the causes of the poverty in the south is that it was controlled politically by an oligarchy that cared primarily about maintaining its own position and wealth, and not much at all about overall welfare.

Okay, still thinking not reading. The following is not to be interpreted as an apology for or defense of conservatism or slavery or hierarchy. Just an amateur anthropological analysis.

1) I am a Marxian. Liberal capitalism is not only not all that, all the horrors we have seen since the Industrial Revolution: slavery, imperialism, immiseration of workers, catastrophic wars and species extinction are inevitable consequences of liberal capitalism as much as the obvious benefits. The inability to see the connections and fantasize utopic reform is itself built in.

2) Real conservatism desires to forestall catastrophic suicidal societal change. Putting limits on production, although conservation happens, is dangerous because droughts, famines, invasions. Better to create a surplus, ideologically limit general effective demand and ambitions, and store the surplus in granaries and state treasuries (or personal fortunes) and military expenditure.

Could we have Herman Daly's steady-state economy if we ideologically encourage unlimited consumption and personal ambition? Fixed permanent hereditary hierarchies can serve to limit disruptions.

(We have currently such hierarchies and demand limitations. The Walmart checker doesn't demand a Porsche and 3000 sq ft house: she thinks she hasn't earned it, doesn't deserve it. We pretend the market roughly distributes according to social contribution, and rationalize like crazy.)

PS: I generally avoid study of US slavery and ante-bellum politic economy, cause American exceptionalism and a tendency to moralize. There were a whole f-ton of conservative agricultural societies with labour oppressed to various degrees.

all the horrors we have seen since the Industrial Revolution: slavery, imperialism, immiseration of workers, catastrophic wars and species extinction are inevitable consequences of liberal capitalism as much as the obvious benefits. The inability to see the connections and fantasize utopic reform is itself built in.

Sorry, Bob, but to me much of this is post hoc. Of the items listed only species extinction was uncommon prior to the Industrial Revolution, and I don't think the IR has much to do with that.

Do you think there was no slavery, imperialism, etc. a thousand years ago? Or two thousand? One word , among many possibilities - Rome.

Took me a while to remember enough to google it. Thought it as Vergil. It's Tacitus.

Maybe I/we need a different concept to oppose to real true conservatism. I guess I hate capitalism and modernism enough to find (ideal) feudalism interesting.

Them Southrons weren't just bullshitting their privilege. They, or their intellectual leaders grew up on Hesiod, Thucydides, the Eclogues. I like them, and Confucius Lao-Tse better than liberals. Try those on demand management. More bigger better faster forever for everybody no longer suits my taste.

Unless we are serious about burning shit down and taking their stuff.

This has little to with Republicans. Almost everybody is a liberal now.

The Colin Duncan after 50 pages looks good. It's 1989 I think. MacKenzie Wark writes about the "anthropocene" (or capitalocene) and keeps up with anthropology and eco-feminism. Kojin Karatani latest two books are good important and interesting.

One parallel between the supporters of slavery and the modern conservative movement is that slaveholders, like the 1% today, were a minority. The majority of whites in the South did not own slaves. Why should this majority support the interests of the slaveholders?

In the run up to the Civil War, a number of Southerners set pen to paper in order to make the case that non-slaveholders should support slavery. The most compreehensive was written by the editor of DeBow's Review, which was printed in the January 1861 edition of the magazine but was also printed separately.[1] One of his arguments was: "The cities, towns, and villages of the South, are but so many agencies for converting the products of slave labor into the products of other labor obtained from abroad, and, as in every other agency, the interest of the agent is, that the principal shall have as much as possible to sell, and be enabled as much as possible to buy." In modern terms, the slaveholders were "job creators."

But the most common argument was that slavery maintained white supremacy. Stephen Fowler Hale of Alabama: "In the Northern States, where free negroes are so few as to form no appreciable part of the community, in spite of all the legislation for their protection, they still remain a degraded caste, excluded by the ban of society from social association with all but the lowest and most degraded of the white race, but in the South, where in many places the African race largely predominates, and as a consequence the two races would be continually pressing together, amalgamation or the extermination of the one or the other would be inevitable. Can Southern men submit to such degradation and ruin?"[2]

In 1857, Hinton Helper took the opposite position in "The Impending Crisis of the South."[3] He assembled data from the census and other sources to argue that slavery was harmful to the South. "Freesoilers and abolitionists are the only true friends of the South; slaveholders and slave-breeders are downright enemies of their own section."[page 364].

This book was banned in the South, and people could be lynched for distributing it there.[4] Today we don't have censorship of this sort. Instead, we have a huge propaganda effort to discredit objective sources of information.

Thinking of the enslaved people as "capital", not as people who should properly be economic actors, is what caused the economic problem. (It's also morally wrong.)

In the antebellum South the hardest-working, most productive members of society were prevented from being part of the economy: buying, selling, using money, making economic choices.

In a normal "free market" economy, meeting their needs & wants -- for food, housing, clothing, education, entertainment, health care, etc etc -- would have been a big source of work (and money) for the rest of the economy. The Southern economy as a whole would have grown, and there would have been strong incentives to become more efficient providing those things.

Yeah, but Marty tells us "only" 25% of the population in the Confederacy were slave owners.

Only roughly 10% of Germans were members of the Nazi Party during the late 1930s and the War years.

As with the Southern slave patrols, which were merely militia-type murder and propaganda squads, amateur anti-Semites in Germany were informally commissioned by the Einsatzgruppen to carry out Hitler's policies against the Other.

They were cross-pollinating entities, much like filth James O'Keefe receiving awards from the addled wife of a Supreme Court Justice.

Something akin to this is swiftly gathering momentum and shape in America under ump. These things can move from inchoate incoherency to murderous, ruthless order very quickly. It will be a pincher movement against all of the republican party's enemies, top-down from the Federal government and from the bottom-up via racist hating base of that monstrosity.

Coming soon, a magnificent catastrophe destroying the enemy in its beds. And I mean the conservative enemy here and in every country it is now infesting across the globe.

Garrison Keillor is now a non-person, despite the fact that he knows more Christian hymns by heart than rapist and esteemed crypto-Christian Republican Senator Roy Moore.

But the former lives in a state the Koch Brothers have vast business interests to protect from liberals like Keillor, at all costs, while Alabama has been pussy-whipped under the lash of the republican party since LBJ caused the racist filth in the Democratic Party to throw in their lot in with the racist filth in the republican party.

Impeachment won't happen. Mueller will be fired by ump or hobbled by white-supremacist Sessions and the murderers in Congress.

If I remember my Tacitus correctly, the quotes bob mcmanus posted are an interesting case. It's from the last stand speech of the leader of the last Britannic tribe before the battle against the Romans commanded by Tacitus' own father-in-law Iulius Agricola (the book is an eulogy to him as a good man who fell victim to a bad emperor).
It is simply unique in Roman literature and the author's true intent is an unsolved problem.

That's ambiguous too. 'expect' can mean (I)'consider likely to happen' ('I expect bad weather this evening')as well as (II)'I want you to...' (as in Great Expectations or 'England expects that every man will do his duty').
Depending on the meaning our Count could mean both (expecting the right to go for final solution(I) and to expect from the sane to counter(II)).

In a normal "free market" economy, meeting their needs & wants -- for food, housing, clothing, education, entertainment, health care, etc etc -- would have been a big source of work (and money) for the rest of the economy.

Actually, it sorta was, just that the South found cotton so profitable that it outsourced its food and goods production to the upper midwest. 1820-1860 were boom times along the Ohio and upper Mississippi Rivers, and canals were built like gangbusters to the near interiors of those states.

So a great deal of Northern development was also based on slavery.

Wiki:"The introduction of steamboats on the Ohio River in 1811 opened up its trade to more rapid shipping, and the city established commercial ties with St. Louis, Missouri and especially New Orleans downriver. Cincinnati was incorporated as a city in 1819. Exporting pork products and hay, it became a center of pork processing in the region. From 1810 to 1830 its population nearly tripled, from 9,642 to 24,831.[16] Completion of the Miami and Erie Canal in 1827 to Middletown, Ohio further stimulated businesses, and employers struggled to hire enough people to fill positions. The city had a labor shortage until large waves of immigration by Irish and Germans in the late 1840s. The city grew rapidly over the next two decades, reaching 115,000 persons by 1850.[14]
Cincinnati in 1841 with the Miami and Erie Canal in the foreground.

Construction on the Miami and Erie Canal began on July 21, 1825, when it was called the Miami Canal, related to its origin at the Great Miami River. The first section of the canal was opened for business in 1827.[17] In 1827, the canal connected Cincinnati to nearby Middletown; by 1840, it had reached Toledo. During this period of rapid expansion and prominence, residents of Cincinnati began referring to the city as the "Queen City".

Cincinnati depended on trade with the slave states south of the Ohio River, at a time when thousands of blacks were settling in the free state of Ohio, most from Kentucky and Virginia and some of them fugitives seeking freedom in the North" too long a quote maybe

So then we have a comparative advantage economic problem, which can be related to our current outsourcing of manufacturing and concentration on FIRE, services and entertainment. And robots as slaves (cheap labor)?

Thinking of the enslaved people as "capital", not as people who should properly be economic actors, is what caused the economic problem. (It's also morally wrong.)

Undoubtedly. But that is what slaves were. They were, in economic terms, capital.

Slavers took out loans using them as collateral. They were just property.

So I am just wondering what an economic analysis with this basis would show:

1. Extreme resistance to "wealth redistribution" (sound familiar?)
2. An extreme incentive to accumulate and expand (i.e., export capital-the demand to expand the system westward).
3. The use of the power of the state to prop up and maintain a system generating superior returns.
4. Barriers to entry (the moral dimension).
5. Return on capital. Was it high or low?

There were great differences between the Southern and Ancient Roman law on slavery. The main reason for this was that the Romans did not conceive slavery as a caste-like status. Second reason was the Roman concept of legal person. In Roman law, only pater familias, the head of the family was a legal person. Even adult sons were legally non-persons, who could only form legal relations with the permission of the father.

However, there was the practical necessity for adult males to have at least some property of their own. This was granted by the fiction of peculium, which was the personal property granted to a son or a slave. The head of family could take it back at will, but while the person held it, they could dispose of it freely: sell, buy, loan and make profit. In law, both the slave and adult son had about equal level of personality. If any member of the household caused damages or was indebted, they could pay the debt out of the peculium, and if that was not enough, the paterfamilias could either cover the rest from his other holdings, or allow the indebted slave or familymember to be sold to cover the debt. In the South, a free-born adult man would be a fully competent legal person, and a white person could not be a slave, no matter how deeply indebted, while slaves were prohibited from doing any kind of business,

Naturally, if the slave was skilled in a trade, it was good HR policy to allow them to hold their peculia and even buy themselves free, as it improved productivity. In many states of the South, manumitting slaves was expressly prohibited.

In the South, the slavery was clearly caste-based. This showed even in minor issues, like in deciding the status of the child. In the South, a child born of a slave was a slave. In Rome, the child was free if the woman had been free at any point of pregnancy. It is a small detail, but it meant that a child would be free even if the previously free mother would, by some misfortune, end up a slave. In the South, where only negroes were slaves, such safeguards were not necessary.

As the most important point, a freed slave became a citizen in Rome. Although not fully competent politically, they enjoyed full commercialrightal and their freeborn children were capable of serving in the army, and their grandchildren could hold political office. In the US, the freed slaves and their descedendants were and are a permanent underclass. The only black president in your history is, curiously, a child of an African royal, without a single drop of slave blood in his veins.

About Joseph: Ii have always thought that the story of Egyptians selling themselves to pharaoh's slavery was a fable developed by a nation that didn't really have a government. For nomads of the desert, or the tribal Iron Age farmers of Palestinian mountains, Egypt with its orderly taxation and steady bureaucracy looked like slavery.

Similarly, many Americans simply can't understand the freedom provided by a Scandinavian-style welfare state. They see only a high tax rate, but don't see its counterpart: freedom to develop oneself freer than almost anywhere else.

It is essentially about booms and busts, California and Yukon Gold Rush for two obvious ecamples, but also many many more. South Africa, Australia, 3 or 4 in Canada. And the land rush in the "Northwest territories", Ohio, Michigan Indiana, Illinois. It is about the suppression of indigenous populations, and a racist imperialist settler ideology that is almost unique to British and descendants, but it changed the way I think about economics.

A boom is about itself. A boom involves incoming capital and speculators and adventurers and outgoing products and profits, depending on current technology. Australia had a Gold Rush, but after refrigerated ships were developed another boom in sheep and mutton. Land in LA.

But the biggest product of a boom is the boom. In the 19th century with expensive transport, what a boom town needed was timber, food for people, and feed for horses. Acres and acres of oats. Also opera houses, lawyers, and banks. Massive massive energy was expended on infrastructure, partially abandoned after the bust, but only partially. Sometimes Capetown and Adelaide remained.

So economics, and a different way to think about say, the late 90s tech bubble and the 2000s housing bubble and the current bitcoin frenzy. Economics is not about equilibriums but about punctuations and emergences and discontinuities.

It also reinforced my thinking about economics as global. You can't think of the Southron slave economy in isolation, it's monocultural extraction ideology was created by and created the industrializations and commercializations and financializations in the rest of the world. It built the Upper Midwest food economy and the Manchester spinning mills and provided the Capital for the railroads and the building of Australia.